Nest, the Thinking Thermostat, Sued over its (In)Ability to Deliver Savings

Nest appeared on sidewalk ads in recent months as an uber-minimalist image of uber-cool, futuristic green tech. It is a thermostat that was developed by one of the many imaginative startups looking to preserve and protect the suffering global ecosystem. It is so smart that it learns your habits and behavior. Nest learns when it needs to expend energy and when it can take a rest.

Credit: Amazon

The saintly project is not, however, bringing satisfied smiles to every one of the environmental well-wishers who have invested in Nest’s project and product. A complaint has been launched seeking $5 million in reparations for the hundreds of thousands of Nest customers, wrote Digital Trends, who claim that Nest may not have been the green boon that it promised.

An Upward Swing

Around the New Year, Digital Trends published an article with a very different tone: Nest Labs was on its way to closing another round of funding, with a valuation of roughly $2 billion. These miraculous little thermostats made their appearance with a sleek design and a cool interface, a minimalist white cube with glowing circle face panel, the brainchild of Tony Fadell, who also happens to be the designer of the original iPhone for Apple.

The presales were hugely successful, the device is easy to install, although Nest offered a “concierge service” for those reluctant to undertake the minor challenge themselves, and the sidewalk ads appeared with a flare for the simple, urgent, and elegant. One Boston ad showed a baby curled up inside the Nest device, promising futuristic care for what’s important, even when you or your mind is elsewhere.

A Simple Premise

The device’s operating premise is ingeniously simple: the “next generation thermostat,” as the homepage self-describes its product, uses a motion sensor and smart technology to “learn your schedule” and “programs itself and can be controlled from your phone.”

“Teach it well,” says the website, and goes on to promise that Nest Thermostat “can lower your heating and cooling bills up to 20 percent.”

According to their homepage, the essential function of Nest is to avoid the waste that an unprogrammed thermostat can cause; Nest addresses the issue by programming itself. It avoids the frustration and time that goes into programming a manual thermostat, noticing and remembering when residents move by its sensors. Placed on a wall in an active part of the house, Nest will learn about the owner’s pattern of behavior by learning when they are at home, when they’re moving around, when they’re inactive, incorporating learned data to use energy only when you’re at home and active.

Turning down the temperature at night manually, for example, will lead Nest to learn that behavior after a few repetitions, says the website. The “Nest Leaf,” an icon which appears when you turn Nest to an energy-saving temperature, allows the user to see an easy and essentialized sign that they’ve fulfilled their good environmental deed for the day. The website offers a host of tips for keeping your “leaf” and your impact strong.

Disappointed Hopes?

However idyllic this leafy ideal may seem, obviously many buyers are less than thrilled with the practical outcome. Justin Darisse, for example, was enthusiastically taken in by promotional videos from Nest, and purchased his unit for $249.99. After testing the device himself, said Digital Trends, Darisse said that his learning thermostat is actually costing him more in energy bills than it did before he joined the Nest trend.

Darisse is the plaintiff in the multi-million-dollar lawsuit on behalf of himself and the other hundreds of thousands of Nest users. Darisse claims, quoting the suit itself, Nest’s base and faceplate heat up, which causes Nest’s temperature reading to be from 2 to 10 degrees higher than the actual ambient temperature in the surrounding room. This defect prevents the thermostat from working properly. As a result, Nest users do not experience the advertised energy savings.”

Although that price tag may sound menacing to you and me, it would not be devastating to Nest Labs which was, fortunately in this case, acquired by Google with a $3.2 billion price tag.

Long-term Impacts

The more looming danger for the company, if the lawsuit goes through, is that its shiny new wunderkind image of environmental well-doing. Such a well-funded, well-founded, well-advertised piece of green technology, if it were to have the rug tugged out from underneath it, might sully the name of other, similar startup ideas that follow in its footsteps. Whether or not Nest really does possess this secret and fatal flaw, the consideration could doubt a serious, dubious shadow over future, similar efforts.

Of course Nest might just be justified through this process, and Darisse’s concerns might simply be disproved and dismissed. That would be a very public vindication for Nest and emphatic proof that the technology does what it promises to do. The impact on Nest itself as a product, quite apart from the financial survival of the Google-owned Nest Labs, is much more difficult to predict.

Current paying owners will likely not throw away their expensive units; Nest would, in a losing outcome, possibly commit to a redesign to rectify the issue. In any case, the dubiousness that would linger over future green startup efforts would be an unfortunate outcome and one that might already be beginning to play itself out.